Top Trucking Issues For 2017
2017 looks to be a time of change for the trucking industry and more specifically were trucking regulations are concerned. Here are the top issues for 2017:
1. How will the change in DOT and FMCSA leadership affect trucking?
New Transportation Secretary, Elaine Chao may have some major changes for U.S. Department of Transportation and the Federal Motor Carrier Safety Administration (FMCSA). What will happen with the Compliance, Safety, and Accountability (CSA) program? Will draft rules like the speed limiter rule get approved?
The DOT’s current Research, Development and Technologies plan for the next four years includes:
- Promoting Safety – Enable Safer Vehicles and Roadways by developing better crash avoidance, performance measures, and other notification mechanisms; as well as mechanisms to protect consumer privacy, commercial motor vehicle safety considerations, and infrastructure-based and cooperative safety systems.
- Improving Mobility – Enhance Mobility by exploring methods and management strategies that increase system efficiency and improve individual mobility. This will be achieved through a variety of programs and applications; including improved traffic management, work zone and incident management, transit management, freight management, and road weather management.
- Improving Infrastructure – Invest and maintain our transportation systems to improve the durability and extend the life of the transportation infrastructure, preserve the existing transportation system, and ensure that the United States proactively maintains critical transportation infrastructure in a state of good repair.
- Preserving the Environment – Limit Environmental Impacts by better managing traffic flow, speeds, and congestion and by using technology to address other vehicle and roadway operational practices. This will be achieved by assisting system users and operators with “green” transportation alternatives, and providing options such as avoiding congested routes, taking alternate routes, using public transit, or rescheduling a trip.
2. Long-term Infrastructure Bill
BusinessRoundtable.org outlines the economic cost of neglecting the nation’s transportation infrastructure and the positive effects of rebuilding it for the 21st century:
- America Is No. 16: The United States’ overall infrastructure quality ranks 16th, behind Germany, France and Japan.
- Highways and Bridges: Urban highway congestion cost the economy more than $120 billion in 2011, and nearly one in four bridges in the national highway system is structurally deficient or functionally obsolete.
- Waterways and Ports: Lock delays, port congestion and lack of facilities for larger ships added $33 billion to the cost of U.S. products in 2010.
- Aviation: The United States is home to just four of the world’s top 50 airports, and aviation congestion and delays cost the economy $24 billion in 2012.
- Transit Rail: Only 25 percent of transit rail station infrastructure is rated “good” or “excellent.”
Increased investment in public infrastructure leads to significant economic benefits:
- Up to $320 billion in economic output would be generated in 2020 if U.S. infrastructure investment were boosted by 1 percent of GDP per year.
- 1.7 million jobs would be created over the first three years by an $83 billion infrastructure package.
- As much as $3 in economic activity is created by every $1 invested in infrastructure. The nation’s leaders can change course and rebuild this vital national asset. It’s time to strengthen our economic foundation by reinvesting in transportation infrastructure.
Will new administration and congress take up a bill to massively increase infrastructure spending? It remains to be seen if the current momentum to fulfill the promise to improve infrastructure will actually produce much-needed repairs. We anxiously await answers to infrastructure funding questions and the timing to get it all done.
3. ELD implementation
The Federal Motor Carrier Safety Administration (FMSCA) has established that by December 10, 2017 trucks and drivers must comply and utilize electronic logging devices (ELDs). Many carriers already utilize this technology, however, those who don’t have until the end of 2017 to comply. These devices are to be installed into trucks that fit a certain criteria and affect the way truck drivers, carriers, and regulators complete processes. ELDs are required to automatically record date, time and location information, engine hours, vehicle miles, and driver identification information. The FMSCA predicts that implementing these new devices could save an average of 26 lives and prevent over 1,800 crashes.*
The Owner-Operator Independent Drivers Association (OOIDA) launched a lawsuit hoping to overturn the mandate one day after publication.
4. Corporate tax reform and depreciation rules
If Congress passes a significant tax reform package, will they allow for 100% depreciation of new equipment purchases? This could potentially alter the economics of new truck purchases for carriers and owner-operators.
As the new administration takes over and new policy proposals are implemented, the U.S. economy has the potential to become stronger in a number of ways:
- Anticipated higher levels of infrastructure spending
- Corporate investment, with lower tax rates and repatriation of foreign earnings
- Political and economic measures that relax regulation and stimulate growth.
The combination of political, regulatory, and economic factors should yield additional rate increases for motor carriers in 2017. Momentum has been building since the middle of 2016 and signs of improvement such as declining unemployment rates, rising real wages for workers, and economic growth of almost 3% in the second half of 2016 will hopefully continue through 2017. It’s likely that increased demand and reduced capacity will result in rate increases, in the low to middle single digits.
Going forward, 2017 has a great chance of being a prosperous year full of growth and innovation that will most likely set a new precedent for speed and quality in the transportation industry.
Diesel fuel prices have come down more than $0.38 per gallon between July 2015 and July 2016 according to the U.S. Energy Information Administration. Regulations continue to pose challenges to carriers as they need to ensure they can deliver their promise to customers while keeping up with new rules and practices. A significant problem the trucking industry is experiencing a lack of drivers. The high level of capacity has carriers feeling the full effect of the driver shortage and carriers are seeking new ways to attract drivers.
Overall, 2017 should see growth in the trucking industry as carriers seek to maintain and improve relationships with shippers and to solve the driver shortage problem.